A deal reached by Quicken Loans Inc. to purchase mortgage servicing rights on agency loans will push its mortgage servicing portfolio past $100 billion and enable it to join the top-10 club.
The Detroit-based company reported in January that it had “significantly” moved into mortgage servicing. Its servicing portfolio finished last year at $80 billion.
Now Quicken reports that its mortgage servicing portfolio has reached $90 billion, “making it the nation’s 17th largest servicer.”
On Thursday, Quicken announced that it reached an agreement to acquire MSRs on $34 billion in home loans from Ally Bank. The total is based the aggregate unpaid principal balance as of Jan. 31.
The pool consists of current Fannie Mae and Freddie Mac loans with higher-than-market interest rates that could substantially benefit from refinancing.
Quicken said the sale, which is subject to approval by Fannie and Freddie, is expected to close during the second quarter.
“With the addition of the $34 billion in servicing from Ally Bank , the company is expected to grow to be a top-10 servicer by mid-year,” the announcement stated.
Quicken said it plans to continue its pursuit of MSR acquisitions while growing its servicing portfolio organically through mortgage originations.
Staffing at Quicken was reported at 10,000, including 7,000 employees in Downtown Detroit.
Ally issued its own statement indicating that the MSRs being sold to Quicken represent its remaining agency MSRs. The sales price is estimated at $280 million.
“This agreement marks a key milestone for Ally and, upon successful completion of the MSR transactions, Ally Bank will have exited all the non-strategic mortgage activities,” Ally Bank President and Chief Executive Officer Barbara Yastine said in the news release. “Going forward, the bank’s full focus and resources will be centered on its leading direct banking franchise and advancing its customer-centric deposit activities, as well as continuing to grow its key role in Ally’s auto finance operation.”
Earlier this month, a deal was announced for Ally to sell MSRs on $90 billion in loans to Ocwen Financial Corp. Ally had an option to sell Ocwen MSRs on another $30 billion in loans but apparently got a better offer from Quicken.